Gold begins to weaken as gold traders know the IMF "gold sale" is nearing.
The technical picture is also breaking down. Gold broke the green uptrend line, traded below the 50 period moving average and has only been able to trade back up to this area and use it as a ceiling.
Meanwhile, the MACD slipped below the zero line for the first time since July of last year. Check out the chart below. Click on it to enlarge it.
Gold breaks down which may give the buck hope in the near term.
So this break down in gold may give the buck a break in the near to medium term. Also, if oil cannot rally and make a new "all time high", it may give dollar traders an excuse to buy into a near term pop.
ECB rates and BOE rates will be out on Thursday morning. The BOE is expected to cut rates by 25 basis points. If they do, there may be furher cause for a near term dollar rally.
It will be interesting to see if Trichet changes his "talk" after he holds rates this time in preparation for cuts in the latter 1/2 of the year.
Don't forget that the G-7 meeting is also this weekend. So I'm sure they'll be talking about supporting the dollar in the future "collectively" if they need to...whether that talk is "on the record or off the record".
Sean Hyman
Currency Director
The Sovereign Society
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